4 Tips to Help You With Your Retirement

When it comes to saving money and even more specifically, planning for retirement from church ministry, it can be hard to figure out where to start! Retirement may seem like a long time away, but small steps taken today can make a big difference down the road. Here are some useful tips for starting your savings journey.

Start now! If you haven’t established a retirement account, there’s no better time than now. Your contributions while serving as pastor are not only tax-sheltered, but are currently eligible for a housing allowance benefit during retirement. Retirement savings also grow tax-deferred. The time value of investing is very powerful. Over a long period of time even modest contributions can build into a significant balance.

This is a hypothetical example that illustrates the future value of regular monthly investments for different time periods. It is based on a 25-year-old with a starting salary of $50,000, annually increasing by 3% until age 67. It assumes an annual deferral rate of 15% with an average annual return of 6%. It is presented for illustrative purposes only and does not reflect actual performance or predict future results of any particular account or investment. GuideStone Financial, October 24, 2023

Save what you can. Many financial pros recommend shooting for 15% of your salary as a retirement savings goal. If it seems high right now, begin with 5% of your salary. If the church has a match, make sure you at least contribute that percentage. To stay on track, raise it by 1% annually, or every time you get a raise. These small annual raises can make a big difference over time!

Invest appropriately. It’s important to invest according to your time horizon and risk tolerance. If retirement is a long time away you can afford to be more aggressive. As you draw nearer to retirement, slowly invest more conservatively. Most retirement plans offer Target Date mutual funds which are a good way to make sure you are allocated appropriately for your situation.

Make it effortless. Setting up an automatic investment plan and letting the system work for you can be an easy way to accumulate a balance over time. Automate your plan as much as possible. Also, consider rolling over other accounts from previous employers into the same plan to consolidate retirement account assets. This way there will be less to keep track of and assure proper account allocation over time.

If your church doesn’t currently have a staff retirement plan, maybe it’s time to inquire with your church leadership about MB Foundation’s 403b retirement plan through GuideStone Financial. There is no cost to the church for setting up a plan, but it allows an avenue for pastors to begin funding a retirement plan for the future. Learn more at MB Foundation’s retirement planning webinar on April 18 at 11:00 am CST. Register here to attend the webinar and to receive the recording following the event.